types of businesses Flashcards
Unlimited liability - the owner is personally responsible for all business debts. their personal assets may also need to be sold to meet outstanding business debts.
Sole Trader
Unlimited liability - the partners are jointly responsible for business debts. their personal asses may need to be sold to meet outstanding business debts.
partnership
Limited Liability - shareholders are limited to the value of their shares for any business debts. no personal assets can be sold.
Company
Depends on if the franchise is set up as a sole trader, partnership or company.
Franchise
Limited Liability - members are limited to the value of their business debts.
cooperative
a business owned and operated by 1 person
sole trader
a business owned and operated by 2-20 partners
partnership
a business which has a separate legal entity from its shareholders. a public company has a minimum of 1 shareholder. a proprietary (private) company has 1-50.
Company
a business or person buys the right to use the name, products and services of an existing business.
Franchise
a business which has at least 5 members with shared management and equal voting rights. it is a separate legal entity
Cooperative
simplest and cheapest to establish. owner has control over all decisions. owner keeps all profit. fewer government requirement reporting (ADVANTAGES)
sole trader
simple and inexpensive to set up. partners bring more money and skills. share of losses (ADVANTAGES)
partnership
limited liability. can raise lots of money through shareholder. unlimited life change in shareholders business. run by board of directors not the shareholders (ADVANTAGE)
company
established reputation products or service and store layout. advertising and marketing support. franchisor provides training. (ADVANTAGE)
franchise
inexpensive to register. equal voting rights. limited liability. no age limit of members. (ADVANTAGE)
cooperative
